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What Do You Do When The Bank Wants Your Condemnation Award?

Property owners typically have a lot on their minds when they find out that the government is going to be taking their property. For residential owners, they need to worry about where they are going to live with their...more

Loan to Own Variation: Bankruptcy May Not Provide The Answers

In re SR Real Estate Holdings, LLC, 506 B.R. 121 (Bankr. S.D. Cal. 2014) – A group of lenders moved to dismiss the debtor’s bankruptcy case on the basis that it was filed in bad faith, or in the alternative asked the...more

Bank is Not Entitled to Deficiency Judgment Against Debtors Who Did Not Consent to Disposal of One of Two Properties Securing the...

The California Fifth Appellate District (Appellate Court) has decided that in a judicial foreclosure action, a bank whose loan was secured by two parcels of real property is precluded by C.C.P. section 726 (the one form of...more

Constitutional Default Interest Rate of 7% Rather Than 10% Default for Breach of Contract, Applies to Prejudgment Interest on a...

Addressing an issue of first impression, the Fourth Appellate District has determined that in a mechanic's lien foreclosure action against an innocent property owner who did not contract with the mechanic's lien claimant, the...more

Just When You Thought You Were Out, They Pull You Back In

It is a rare occasion for a secured lender to foreclose on collateral with a value in excess of the entire debt owed, particularly following a bankruptcy filing by the borrower, but on that rare occasion the lender should...more

CMBS Issuer wins negligence claim against valuer in English High Court

In a judgement of major significance for the commercial mortgage backed securities (CMBS) market, the High Court has ordered a negligent valuer to pay €32 million damages to a CMBS issuer. This is the first time a...more

Mechanics Lien Subordination: Illinois Further Limits Construction Lenders’ Ability To Ensure Priority Against Mechanics Liens

On July 16, 2014, Illinois enacted Public Act 98-764 (Senate Bill 3023) (“SB 3023”), which amends the Illinois Mechanics Lien Act (770 ILCS 60/ et seq.) (the “Act”) to prohibit subordination of mechanics liens on Illinois...more

Post-Petition Interest: Not Very Predictable

A senior mortgagee battled the debtor and a junior mortgagee over its entitlement to post-petition interest: If and when did it become oversecured and thus entitled to interest? Was it entitled to interest at the default...more

Keeping the Benefit of Your Bargain: Strengthening Your Right to Prepayment Premiums

Anyone involved in commercial lending transactions is familiar with provisions of loan agreements that provide for compensation to the lender in the event the indebtedness is paid in advance of the contemplated due date....more

The Washington Court of Appeals Strengthens the Ability of Lenders to Obtain Summary Judgment Against Commercial Guarantors on...

Post-foreclosure deficiency lawsuits against guarantors of commercial loans can be expensive and time consuming — particularly when measured against the sometimes uncertain collectability of the deficiency judgment. Under...more

Unmitigated Waivers: Guarantors Remain Liable Despite 4-Year Delay in Foreclosure Sale

If a lender delays foreclosure allowing years of default interest to accrue such that a guarantor’s obligation increases from $6 million to $12 million, should the guarantor remain on the hook for the full $12 million? In...more

District Court Denies Distressed Funds the Right to Vote on Bankruptcy Plan

The US District Court for the Western District of Washington (the "District Court") recently affirmed a bankruptcy court decision that prohibited a transferee of a secured lender's interest in a loan from voting on a debtor's...more

Prepetition Default Interest — Take Nothing For Granted

The case is In Re Shree Mahalaxmi Inc., 503 B.R. 794 (Bankr. W.D. Tex. 2014). After a mortgage lender learned of a prepetition default during a bankruptcy, it filed an amendment to its proof of claim to add prepetition...more

Reviving Construction Projects — How to Avoid Creating a Frankenstein Monster

Reviving dead or moth-balled projects presents risks and rewards. The rewards include a shorter ramp-up period. The risks include the revival of claims akin to the unintended creation of a Frankenstein monster. But those...more

Client Alert: The Arizona Court of Appeals Holds the Right to a Fair Market Value Hearing Cannot be Waived in a Deficiency Action

In CSA 13-101 Loop, LLC v. Loop l01, LLC, et al., Loop 101 borrowed $15.6 million from MidFirst (which later assigned its rights under the loan to CSA as an intercompany transfer) to build a commercial office building. The...more

Banks are Entitled to Recover Compensation in Condemnation Actions

Eminent domain or condemnation is the process by which the government is permitted to acquire a citizen’s private property for public use, after paying just compensation. Typically, property is acquired by the government...more

Rogers Towers: Garnishing Professional Fees After Close of Bankruptcy Proceeding

It is not an uncommon practice for commercial lenders or real estate owners to employ a broker to assist with the sale of property for a commission. Recently, a corporation owning a marina in South Florida filed for Chapter...more

Scion Breckenridge Managing Member, LLC v. ASB Allegiance Real Estate Fund, No. 437, 2012 (Del. May 9, 2013)

In this en banc opinion, the Delaware Supreme Court affirmed the Court of Chancery’s reformation of three real estate joint venture agreements, based on unilateral mistake by one joint venture party and knowing silence by the...more

In re School Specialty, Inc., Case No. 13-10125 (KJC) (Bankr. D. Del. Apr. 22, 2013)

In an age of historically low interest rates, lenders rely on fee income and other devices to enhance their returns. One of these mechanisms -- and one that can have dramatic consequences for a borrower -- is the inclusion of...more

Real World - Spring 2013: Damages include fall in market

Two recent cases have highlighted circumstances in which damages for breach of contract may include loss caused by a fall in market values....more

Lien Rights of Lenders and Landlords - Part I

Commercial real estate landlords and the lenders for their tenants have competing interests with respect to the tenant's personal property located at the demised premises. The landlord is looking to secure the tenant's rental...more

Does Non-Recourse Liability Still Exist?

About a year ago to the day, the real estate financing market took an unexpected turn. Year after year for many years prior, we all witnessed the real estate market take a huge beating. However, never could we have expected...more

Nevada Supreme Court Clarifies Lender v. Mechanics' Lien Priority Disputes

On October 25, 2012, the Nevada Supreme Court, in a case of first impression, held that equitable subrogation cannot be used as a method to repair broken priority over mechanics' liens, but left the door open to the potential...more

Rogers Towers: Appraisal Dates and Deficiency Judgments: Is Close Good Enough?

In Florida, the legal standard for a mortgagee to obtain a deficiency judgment following foreclosure is to establish the difference between the amount of the indebtedness and the fair market value of the foreclosure property...more

Supreme Court Upholds the Right to “Credit bid” in RadLAX Gateway Hotel, LLC, et al. v. Amalgamated Bank

The secured lender industry experienced a collective sigh of relief on May 29 after the Supreme Court ruled in RadLAX Gateway Hotel, LLC, et al. v. Amalgamated Bank that credit bidding remains a viable option to protect...more

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